YOU’RE LOOKING FOR FRANCHISE LOAN SOLUTIONS!
A SMALL BUSINESS LOAN TO FUND YOUR FRANCHISE PURCHASE
You've arrived at the right address! Welcome to 7 Park Avenue Financial
Financing & Cash flow are the most significant issues facing business today.
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs
EMAIL - sprokop@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Franchise business financing loans can often make the potential or existing franchisee fee very... shall we say ' Unfriended ‘when it comes to achieving the goals they have set out and making the decision around investing in a franchise.
WHAT ARE 2 MAIN CHALLENGES IN ACQUIRING A FRANCHISE
Franchising for the entrepreneur or existing franchisee comes with two business challenges at the start of the journey- how to buy a franchise and grow one. Let's dig in.
THE FRANCHISE INDUSTRY IS ... POPULAR!
We can't think of a ' hotter' industry to be a part of these days, and that’s a good thing given the tremendous importance the industry plays in economic growth, employment, etc. In many cases, both experienced and new entrepreneurs view this business model to achieve viable employment and business ownership.
DO FRANCHISORS OFFER FINANCING WHEN YOU BUY A FRANCHISE?
If all of the above is the case, why are many business people challenged for the franchising finance they need. While it might seem logical that the franchisor itself might be a source of financing for the business, those situations are scarce ones. It's not that the franchisor doesn't want to help; it’s just that their business model involves selling franchises, not financing them.
WHO ARE FRANCHISE LENDERS
So who then are the lenders that focus on Canadian franchising finance? While they are a tiny select handful of specialty lenders, most franchises in Canada are financed by the Government SBL loan, owner equity, and assorted finance strategies from commercial finance firms that play a key role in asset acquisition and cash flow finance.
DO BANKS FINANCE A FRANCHISE
For your bank to consider financing in this Canadian business segment, it’s a case of ensuring your relationship with the bank is well established. That will come down to providing income history, employment history and experience, and ensuring you have the credit score and financial net worth to approve a stand-alone loan. While some maintain that the type and name of the franchise you are looking to acquire is important, we keep it's all about the basics we've mentioned already.
When a Canadian chartered bank doesn’t finance your business on a stand-alone basis doesn’t forget you have a great partner in the CSBF loan, which has recent changes making it even more attractive to entrepreneurs. Don't also forget that we're talking about existing franchises also - if you have determined valid reasons for a current owner to sell, and the franchisor will allow that sale, the benefits of buying an existing and proven business are significant.
THE ATTRACTION OF A GOVERNMENT GUARANTEED LOAN TO BUY A FRANCHISE
The interest rate on the government-guaranteed loan program is very attractive, and with those interest rates come flexible terms and conditions including limited personal guarantees and repayment/prepayment without penalty, something many other business loans do NOT offer.
HOW TO PREPARE A FRANCHISE LOAN APPLICATION
In specialty or indirect franchise financing, the basics NEVER go away. They include having a solid business plan, ( 7 Park Avenue Financial business plans meet and exceed lender requirements ) cash flow forecast, good personal credit, and the ability to verify your assets and net worth. You can purchase a new franchise or an existing one, sometimes called' refranchising' with the same franchise fee - The franchise fees that are a part of your franchise agreement are typically not financed and paid directly by the franchisee.
CAN YOU BUY A FRANCHISE WITH BAD PERSONAL CREDIT
Financing solutions available often revolve around your personal finances and credit score and personal credit history, all of which are key factors in loan approval.
DUE DILIGENCE IS IMPORTANT
When considering the purchase of an existing franchise, don’t forget to do the right amount of due diligence - get the current and historical financials, examine bank statements to verify cash inflows, and ascertain the right reason the owner is selling.
CONCLUSION
Don't forget that franchise business financing loans are a journey in some respects. Financing is needed to acquire the business, and you'll need working capital and possibly new debt alternatives to grow the business.
Don't want to get ' unfriended ' by the challenges of financing business loans successfully? If you want to make franchising success your finest hour, consider seeking out and speaking to a trusted, credible and experienced Canadian business financing advisor who can assist you in your loan needs.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
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